Abstract

No company exists in vacuum and the continuity of any company is determined by factors that are within and outside their control. Based on this fact, this study was designed to investigate the influence of working capital management and three macroeconomic variables (inflation, foreign exchange rate and interest rates) on the value of ten Indonesian Textile Companies for the years 2005-2014. The study used path analysis techniques to analyze data. Based on statistical analyses, it was observed that investment structure, financing structure and liquidity significantly affected the performance and the value of textile companies. Also, foreign exchange rate and interest rate significantly affected the performance and the value. Moreover, cash conversion-cycle, working capital turnover, and interest rate did not significantly affect their performance. The performance was not mediated by the effect of cash conversion cycle, working capital turnover, and inflation on the company’s value, but it successfully mediated the effect of investment structure, financing structure, liquidity, foreign exchange rate and interest rates on the companies' value.